Earthmover specialist Caterpillar has downgraded its prediction of sales and revenue for 2016 by £1billion.
Caterpillar, which employs hundreds of people at its plant in Peterlee, announced first-quarter 2016 sales and revenues of $9.5 billion, down from $12.7 billion last year.
"While first-quarter results were about as we expected, sales and profit were well below the first quarter of 2015," said Chairman and Chief Executive Officer Doug Oberhelman..
"Sales declined across the company with substantial reductions in construction, oil and gas, mining and rail. While many of the industries we serve are challenged, we remain focused on what we can control: the quality of our products, our market position, safety in our facilities and continued restructuring and cost reduction.
"In fact, our period costs and variable manufacturing costs in the quarter were nearly $500 million lower than the first quarter of 2015."
The firm says it has seen some positive signs, including improvement in construction equipment demand in China and better order activity than expected, but other parts of the business still face challenges, so it has lowered its prediction for the year by about two per cent.
Sales and revenues in 2016 are now expected to be $40-$42billion, with a midpoint of $41billion. The previous outlook was a range of $40-$44billion, with a midpoint of $42 billion.
Caterpillar said the reduction was a result of several factors, including lower transportation sales and lower mining sales, that collectively add up to about $1billion.
"While many of the industries we serve are challenged today, we’re looking ahead and investing for the future,"Mr said Oberhelman.
"Our digital strategy is an exciting investment for the long term. We’re hard at work, inside Caterpillar and with our digital partners, developing the data architecture and applications that will make our products smarter and help our customers improve productivity and safety.
"Our goal is to help customers be more productive, better manage their fleets and make more money with Caterpillar than they could with our competitors."